Polymarket’s Bold Move Toward In-House Trading Desk Sparks Industry Debate

Polymarket shifts gears—building its own trading desk to bypass traditional market makers.

The Setup

Prediction markets just got a major infrastructure upgrade. Polymarket's pivot toward an in-house trading operation cuts out middlemen, giving the platform direct control over liquidity and pricing. No more relying on external firms to fill orders.

Why It Matters

This isn't just an operational tweak—it's a power move. By internalizing market-making, Polymarket slashes costs and tightens spreads. Users get better execution. The platform captures more value. It's the kind of vertical integration that makes traditional finance firms sweat.

The Skeptic's Corner

But control comes with questions. Can an in-house desk maintain neutrality during volatile events? Will internal conflicts of interest emerge? And let's be honest—when a platform becomes its own market maker, it's basically betting against its own users. A classic Wall Street move, just with crypto flair.

The Bottom Line

Polymarket isn't just building a feature—it's rewriting the rulebook for prediction markets. This move could redefine how decentralized platforms handle liquidity forever. Or it could become a cautionary tale about too much centralization. Either way, the market will decide.

TLDR:

• Polymarket’s new market-making desk faces criticism over shifting core values.
• Polymarket risks alienating users with its new in-house pricing model.
• Is Polymarket’s move to a sportsbook model a revenue strategy or a risk?
• Experts warn of reputational and legal challenges for Polymarket’s new desk.
• Polymarket’s shift to internal market-making could reshape its identity.

Polymarket has announced plans to establish an internal market-making team that WOULD trade directly against its users. The initiative comes as part of the platform’s efforts to expand its operations in the United States, following the resolution of regulatory concerns from a 2022 case. The new desk would mirror a sportsbook model, where Polymarket sets prices and absorbs risks instead of relying on user-driven liquidity.

Polymarket’s Strategy: Revenue Over Product Improvement

The decision to introduce an internal trading desk marks a significant shift for Polymarket, traditionally known for its user-driven prediction markets. The company has approached traders and sports bettors about joining the new team, which would price and match bets through a Request for Quote (RFQ) protocol. Industry observers have raised concerns about the company’s motivation, noting that Polymarket’s primary goal seems to be generating revenue rather than improving the platform’s product offerings.

Experts like Harry Crane, a statistics professor at Rutgers University, believe that while the trading desk could offer a new revenue stream, it also brings significant reputational and legal risks. Crane argues that a profitable desk could create PR issues and legal exposure, similar to the challenges faced by Kalshi, another prediction market platform with a similar model. Critics contend that Polymarket risks alienating its Core audience, who value the platform’s neutrality and the market-driven nature of its pricing.

A Move That Could Reshape Polymarket’s Identity

Polymarket’s foray into the sportsbook model could redefine its identity and cause friction with users who joined the platform for its unique prediction market experience. In a sportsbook, the house sets prices, often embedding a margin to guarantee profit. This shift raises questions about Polymarket’s commitment to providing an unbiased platform where prices reflect collective expectations rather than a single entity’s interests.

The new structure could blur the line between a prediction market and a traditional sportsbook, undermining Polymarket’s CORE value proposition. Users may begin to question whether the odds on the platform reflect genuine market sentiment or if they are influenced by the internal desk’s pricing decisions. The company’s reputation as a reliable source of real-world probabilities could be at risk, particularly after its role in the 2024 U.S. election cycle when it was widely cited by news outlets alongside polling data.